Cheap gas in Iran is not entirely a blessing

December 09, 2008
Cheap gas.... .. is not entirely a blessing.
Posted by Warren Strobel
McClatchy blog

You think gas is getting cheap back in the United States? Try 10 cents a liter. (Please don't ask me to do the liter-to-gallon equivalent right now, but that's CHEAP).

That's what Iranians pay for gas under a system of government subsidies for basic goods like energy, sugar and bread that dates back to the Shah's time and is financed by Iran's massive crude oil exports. (Iranian citizens can purchase 120 liters a month at the subsidized price, I'm told, then have to pay a more market-oriented rate for anything above that).

For many working-class Iranians, the subsidies are a necessity to just get by, a cushion they couldn't imagine living without. But they tend to have unintended consequences. It's basic economic behavior - gas is cheap, so people drive a lot. A LOT.

Traffic is a nightmare in Tehran, a city of about 12 million, and pollution is a nasty, and no doubt health-threatening, blanket over the Iranian capital. On Monday, a particularly bad day, you could, if you really tried, make out behind the smog the beautiful Albroz Mountains, whose foothills begin just outside the city and rise majestically over it on rare clear winter's days.

Iranians are gracious and generous hosts, and I've been invited into nearly a half-dozen homes, both upscale Tehrani apartments and working-class domiciles, in my 9 days here. But many also tend to keep their homes heated to a toasty temperature. Why not? Home heating is subsidized too.

Saeed Laylaz, an independent economist who worked for the reformist government of former President Mohammad Khatami, said Iranians emit more carbon dioxide into the atmosphere per person - 6.4 metric tons - than Indians do at 1.2 metric tons. (The figure for the US is 20.6 metric tons per capita). Total Iranian emissions have doubled since 1990, Laylaz said.

Diesel gas is even cheaper here, at 2 cents per liter. "Nobody walks in this country," he said.